Chandler v. Northwest Engineering Co.

• Decision Date: 18 November 1981
• Citation: 444 N.Y.S.2d 398,111 Misc.2d 433
• Court: New York Supreme Court
• Parties: Helen C. CHANDLER, as Administratrix of the Goods, Chattels and Credits of James R. Chandler, Senior, Deceased, Plaintiff, v. NORTHWEST ENGINEERING CO., and Hodge & Hammond, Inc., Defendants. HODGE & HAMMOND, INC., Third Party Plaintiff, v. JOHN ARBORIO, INC., Third Party Defendant. NORTHWEST ENGINEERING CO., Second Third Party Plaintiff, v. JOHN ARBORIO, INC., Second Third Party Defendant.

Page 398

444 N.Y.S.2d 398

111 Misc.2d 433

Helen C. CHANDLER, as Administratrix of the Goods, Chattels and Credits of James R. Chandler, Senior, Deceased, Plaintiff, v. NORTHWEST ENGINEERING CO., and Hodge & Hammond, Inc., Defendants.

HODGE & HAMMOND, INC., Third Party Plaintiff, v. JOHN ARBORIO, INC., Third Party Defendant.

NORTHWEST ENGINEERING CO., Second Third Party Plaintiff, v. JOHN ARBORIO, INC., Second Third Party Defendant.

Supreme Court, Bronx County.

Nov. 18, 1981.

Harold Lee Schwab, Lester, Schwab, Katz & Dwyer, New York City, for plaintiff.

James S. Brown, Bower & Gardner, New York City, for defendant Northwest.

Robert Quirk, Quirk & Bakalor, New York City, for defendant Hodge & Hammond.

John F. McNulty, McNulty, Dwyer & Duffy, New York City, for defendant Arborio.

JOHN A. K. BRADLEY, Justice:

In this action, plaintiff Helen Chandler brought suit against Northwest Engineering Co. ("Northwest") and Hodge & Hammond, Inc. ("H & H"), who in turn impleaded the third-party defendant, John Arborio, Inc. ("Arborio"). Mrs. Chandler's claim for the wrongful death of her husband, James, sounded in negligence and strict products liability.

On September 3, 1981, a jury found both Northwest and H & H liable on both causes of actions, and found Arborio liable over in the third-party action. Total damages were assessed at $600,000. In a Dole v. Dow Chemical Co., 30 N.Y.2d 143, 331 N.Y.S.2d 382, 282 N.E.2d 288 (1972), apportionment, the jury found Northwest 90% liable and Hodge & Hammond 10% liable; on the third-party action, the jury found Arborio 50% liable for contribution.

Plaintiff's intestate, James R. Chandler, an employee of Arborio, was killed in the course of employment on April 18, 1972. At the time of his death, he had been working for several months for Arborio as a labor foreman engaged in the construction of a five-mile strip of New Jersey Highway Route 15 in Sparta, New Jersey. Mr. Chandler's death resulted from an accident involving a Model 80-D Northwest Shovel, designed and manufactured by Northwest. Mr. Chandler's employer Arborio ordered the shovel from Northwest which shipped it directly to Arborio. The shovel was actually distributed by Hodge & Hammond, which had a leasing agreement and purchase option with Arborio as Northwest's representative. The option was exercised and Arborio purchased the shovel from H & H.

The 80-D shovel was being used to dig a trench. Mr. Chandler released the "dog brake" on the shovel, which then started moving forward toward Chandler. Although he ran to escape, Chandler was overtaken by the shovel. He was killed instantly.

H & H has now moved to set aside the jury verdict based upon several grounds. For the reasons stated herein, the motion is denied.

1. Choice of Law

Preliminarily, mention should be made of the choice of law issue in this chase. Third-party defendant Arborio has cross-moved for an order setting aside the verdict based, in part, upon the argument that New Jersey law, rather than New York law, governs the third-party action. New Jersey law would bar an action for contribution against an employer who, like Arborio, has been held obligated to pay, and has been paying, workers' compensation benefits on the claim. N.J.Stat.Ann. §§ 34:15-8. In New York, election of that remedy by the employee does not preclude an action by a third party for contribution against the employer.

In resolving the conflict as to which state's law should apply to both the main action and the third party action, this court looked to the seminal opinion in Babcock v. Jackson, 12 N.Y.2d 473, 240 N.Y.S.2d 743, 191 N.E.2d 279 (1963). The Court of Appeals in Babcock abandoned the rigidity of the lex loci delicti doctrine in favor of the "center of gravity" or "grouping of contracts" principle which gives "controlling effect to the law of the jurisdiction which, because of its relationship or contact with the occurrence of the parties has the greatest concern with the specific issue raised in the litigation." Id. at 481, 240 N.Y.S.2d 743, 191 N.E.2d 279.

While courts in cases subsequent to Babcock have sometimes struggled with its doctrine, and at times have sought a more structured rule in its application (e. g., Neumeier v. Kuehner, 31 N.Y.2d 121, 335 N.Y.S.2d 64, 286 N.E.2d 454 it is the opinion of this court that its principle is still the law of this state. See O'Connor v. Lee-Hy Paving Corp., 579 F.2d 194 (2d Cir. 1978) cert. den. 439 U.S. 1034, 99 S.Ct. 638, 58 L.Ed.2d 696, rehearing denied 441 U.S. 918, 99 S.Ct. 2023, 60 L.Ed.2d 392.

Pursuant to that doctrine, this court examined the relationship of New Jersey and of New York to the facts to determine which state's interest predominates. In view of the fact that New Jersey's major basis for applying its law was that it was the situs of the accident, the following New York contacts indicate that New York has the more significant interest in applying its law: the residence of plaintiff and of plaintiff's decedent, the incorporation of Hodge & Hammond and of Arborio, the sale and delivery of the injury-causing instrumentality, and the base of operations for Arborio were all in New York. These contacts are particularly significant in choosing New York law as governing the third-party action, where the issue revolved around the potential for liability of a New York employer to a New York defendant, rather than around the facts surrounding the New Jersey accident itself.

New York has a compelling interest in protecting the rights of its citizens to seek reimbursement for wrongs committed by third parties. This interest becomes pre-eminent when both parties are New York citizens whose relationship arose in New York, and when a great deal of the conduct which forms the basis for apportionment of responsibility between the parties occurred in New York. The wrongful conduct of Arborio was divided between New York, where it failed to instruct its employees properly, and New Jersey, where it improperly operated the pull shovel; thus, even under a lex loci delecti analysis, it would not have been erroneous for this court to apply New York law. For these reasons, this court adheres to its original decision to apply New York law to find the third-party action for contribution not barred by election of New Jersey worker's compensation benefits.

2. Negligence

Movant's first ground for setting aside the verdict asserts that "a sales agent properly be held liable in negligence to an injured third party for nonfeasance, such as failure to inspect, test and/or warn."

The general rule is that although a seller with reason to know of a dangerous or potentially dangerous condition in a product he sells must take reasonable care to protect its user, he has no duty to ascertain unknown facts. ¹ The issue then becomes under what circumstances will a seller be deemed to have "reason to know" of a potential danger.

The reputation of the manufacturer, or source of supply (see Restatement Torts 2d § 402 comment "e"), is but one factor to consider in determining whether a seller has been put on notice which would require his taking protective measures. In Alfieri v. Cabot, 17 A.D.2d 455, 235 N.Y.S.2d 753 (1st Dep't 1962), aff'd 13 N.Y.2d 1027, 245 N.Y.S.2d 600, 195 N.E.2d 310 (1963), the Appellate Division found no obligation upon A & P supermarket to test charcoal briquets under all the circumstances present in that case: the briquets were part of a mass shipment which had arrived at A & P--and were sold by A & P--already packaged by the manufacturer; there was no dangerous potential inherent in proper use of the briquets known to A & P or the public; A & P could not have discovered the danger by mere physical inspection, and there was no showing that the ultimate purchaser relied upon A & P's special knowledge or expertise. In Outwater v. Miller, 3 A.D.2d 670, 158 N.Y.S.2d 562 (2d Dep't 1961), the Second Department considered such factors as whether the vendor bought from a reputable source of supply and whether the ultimate purchaser bought the chattel by brand name. See also Pimm v. Graybar Electric Co., Inc., 27 A.D.2d 309, 311, 278 N.Y.S.2d 913 (4th Dep't 1967), which found that "might have been the duty to the distributor to inspect ..., to discover the defect and to warn," there was no breach in view of the fact that the product was purchased by catalogue number and routed from a reputable manufacturer in a closed carton directly to the buyer.

As with any other issue requiring a determination on reasonableness, the question of the existence and extent of H & H's duty to inspect and/or test was a question of fact, properly consigned to the jury to determine in light of all the attendant circumstances. With specific regard to the facts in the case at bar, it must be emphasized that this is not a case of a defect in the manufacture of a perfectly designed product. In that situation, it would perhaps require a greater showing to demonstrate a duty on the supplier, retailer, distributor or other nonmanufacturer defendant to inspect each product for possible defects. Rather, this is a case where the alleged defect was in the design of the shovel, a design with which, according to testimony adduced at trial, H & H was or should have been familiar. Thus, it was well within the province of the jury to find that H & H was privy to facts giving rise to "reason to know" of the defect in that design, creating an obligation to warn. The jury could then have determined that that duty was unmet, constituting negligence on H & H's part.

Similarly, it was the function of the jury to determine whether, in this situation, H & H had a duty to warn of the danger. "a particular product ... may become unreasonably dangerous in its use, a seller ... may be required to give ... warning on the container as to the proper use thereof." Kaempfe v. Lehn & Fink Products Corp., 21 A.D.2d 197, 199-200, 249 N.Y.S.2d 840 (1st Dep't 1964), motion denied...